Assessing Dividend Sustainability and Future Prospects
Global Medical REIT Inc (GMRE, Financial) recently announced a dividend of $0.21 per share, payable on 2023-10-10, with the ex-dividend date set for 2023-09-21. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Global Medical REIT Inc's dividend performance and assess its sustainability.
What Does Global Medical REIT Inc Do?
Global Medical REIT Inc is a Maryland corporation engaged primarily in the acquisition of purpose-built healthcare facilities and the leasing of those facilities to strong healthcare systems and physician groups. Its healthcare facilities are located in secondary markets and suburbs of primary markets and are typically leased to single-tenants under triple-net leases. Its tenants are physician groups, regional or national healthcare systems or combinations thereof. The company's principal business objective is to provide attractive, risk-adjusted returns to its stockholders through a combination of reliable dividends and long-term capital appreciation.
A Glimpse at Global Medical REIT Inc's Dividend History
Global Medical REIT Inc has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Global Medical REIT Inc's Dividend Yield and Growth
As of today, Global Medical REIT Inc currently has a 12-month trailing dividend yield of 8.81% and a 12-month forward dividend yield of 8.81%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Global Medical REIT Inc's annual dividend growth rate was 1.60%. Extended to a five-year horizon, this rate decreased to 0.90% per year. Based on Global Medical REIT Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Global Medical REIT Inc stock as of today is approximately 9.21%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Global Medical REIT Inc's dividend payout ratio is 2.63. This may suggest that the company's dividend may not be sustainable.
Global Medical REIT Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Global Medical REIT Inc's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 4 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Global Medical REIT Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Global Medical REIT Inc's revenue has increased by approximately 0.20% per year on average, a rate that underperforms than approximately 55.13% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Global Medical REIT Inc's earnings increased by approximately 26.00% per year on average, a rate that underperforms than approximately 23.25% of global competitors.
Next Steps
In conclusion, Global Medical REIT Inc's consistent dividend payments, modest growth rate, and fair profitability paint a mixed picture for its dividend sustainability. While the company's payout ratio raises concerns, its growth metrics suggest potential for future earnings expansion. Investors should continue to monitor these factors closely in the coming quarters. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
